Joseph v. Baxter Intern. Inc.

Citation: 614 F. Supp. 2d 868Docket: Case No. 1:08HC60053

Court: District Court, N.D. Ohio; May 27, 2009; Federal District Court

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The case involves a products liability and medical malpractice lawsuit filed by the Joseph family against Baxter International, Inc. and several healthcare defendants, stemming from the alleged wrongful death of Merline Joseph due to ingestion of contaminated Heparin. The Josephs initially filed in Louisiana state court, but Baxter removed the case to federal court, asserting diversity and federal question jurisdiction. The Josephs sought to remand the case back to state court and requested attorney's fees, while Baxter filed a motion to stay proceedings pending a potential transfer by the Judicial Panel on Multidistrict Litigation (JPML). 

The court ruled to deny the Josephs' remand motion concerning Baxter, but granted it for the Healthcare Defendants, who are Louisiana residents. Consequently, the Josephs' request for attorney's fees was denied, and Baxter's motion to stay was deemed moot due to a prior transfer decision by the JPML. The case highlights the complexities of jurisdiction and removal processes, emphasizing that the burden lies with the removing party (Baxter) to establish federal jurisdiction.

The court must grant the Josephs' motion to remand to state court if neither complete diversity jurisdiction nor federal question jurisdiction exists. Federal removal jurisdiction requires either diversity of citizenship or a federal question. Given the Josephs and the Healthcare Defendants are both from Louisiana, complete diversity is not present. However, the court has the authority under Rule 21 of the Federal Rules of Civil Procedure to sever claims against nondiverse dispensable defendants, allowing it to retain jurisdiction. To determine if the Healthcare Defendants are dispensable, the court must assess their necessity using a two-step process under Rule 19. A party is deemed necessary if their absence prevents complete relief, impairs their ability to protect their interests, or risks inconsistent obligations for existing parties. The court finds that the Healthcare Defendants are not necessary because the Josephs' claims of medical negligence against them do not overlap with their products liability claim against Baxter, which involves allegations related to the design and recall of Heparin. Thus, the Healthcare Defendants do not meet the necessary criteria, allowing the court to consider dropping them to achieve diversity jurisdiction.

The Magistrate determined that the healthcare defendants are not indispensable parties and the case can proceed without them, a conclusion supported by precedents where similar defendants were deemed dispensable. In Todd by Todd v. Merrell Dow Pharms. Inc., the court ruled that a physician involved in a product liability case was not indispensable. This was echoed in Phillips v. Knoll Pharm. Co., where the court dismissed nondiverse physician defendants to maintain diversity jurisdiction, allowing plaintiffs to pursue state court claims against them. The Josephs also retain the ability to pursue claims against the Healthcare Defendants in state court, which, although inconvenient, does not unfairly prejudice them. The potential for settlement in this MDL context, along with the shared burden of discovery against Baxter, favors the current proceedings remaining in federal court. The Magistrate's decision aligns with recent JPML rulings indicating insufficient overlap between medical negligence claims and claims against Baxter. Consequently, the healthcare defendants are severed from the case to perfect diversity jurisdiction over Baxter. Additionally, Baxter contends that the claims against the Healthcare Defendants may be dismissed under Rule 21 due to fraudulent misjoinder.

Fraudulent misjoinder occurs when a plaintiff improperly joins unrelated claims of non-diverse plaintiffs against a defendant, or unrelated claims of a plaintiff against non-diverse defendants, as established in Tapscott v. MS Dealer Serv. Corp. Courts have criticized the fraudulent misjoinder doctrine, leading to a recent case in the Northern District of Ohio that declined its application, noting the Sixth Circuit has not adopted it. However, Rule 21, which governs the joinder of parties, can still apply even without misjoinder or nonjoinder, as affirmed by the Supreme Court. This allows for the dismissal of properly joined parties to maintain diversity jurisdiction.

Regarding federal question jurisdiction under 28 U.S.C. § 1331, Baxter argued that the Josephs' claims challenged FDA determinations and federal requirements for prescription drugs. The court disagreed, citing Merrell Dow Pharm. Inc. v. Thompson, which indicated that the lack of a private cause of action in the FDCA meant that alleging an FDCA violation did not create a federal issue. In a previous case, Arnold v. Baxter Healthcare Corp., the court similarly found no federal question jurisdiction over state-law claims that did not raise substantial federal issues.

Ultimately, the court found complete diversity jurisdiction by severing and remanding the Josephs' claims against the non-diverse Healthcare Defendants without prejudice. The court ordered that the plaintiffs' motion to remand be denied except for the claims against the Healthcare Defendants, which were severed and remanded. The defendant's motion to stay was deemed moot, and the plaintiffs' request for attorney's fees was denied. The court noted that its observations regarding potential prejudice to Baxter were specific to the case at hand and did not prejudge any future remand motions.